INVESTIGATION: Prepaid electricity meters — a scheme that became a scam

Author:

Abiose Adelaja Adams

A year ago, the electricity regulatory body introduced a regulation directing power distribution companies (DisCos) to supply consumers with more prepaid meters. How well has this worked? TheCable, in an investigation spanning across 33 communities in 10 states, finds out that power consumers think whole scheme is a scam.

Caroline Aku, a housewife, lives in Lokoja, Kogi state. In September 2018, the Abuja Electricity Distribution Company (AEDC) collected N17,000 from her for a prepaid meter.

“They (AEDC) came on the 28th of February 2019, and promised to fix my light and give me prepaid meter, but as at 5th of March, my meter is yet to arrive. I visited their office, but none of the officials attended to me. I saw other people there too making the same complaints,” she says.

According to the new regulation on meter asset provider service, customers are not supposed to pay for meters after this regulation was passed in April 3, 2018. The regulation clearly states the role of the 11 distribution companies (DisCos): they are to engage the services of meter asset providers (MAPs) who will supply and install meters. And this process of engaging MAPs ought to have been completed by November 2018.

Caroline is anxiously waiting for her meter

“DisCos shall conclude the procurement process for the engagement of the first set of MAPs within 120 days from the 3rd day of April,” MAPS regulation states.

In other words, each of the DisCos ought to have completed the first set of engagement of meter providers by July 3, 2018, but the deadline was extended to November 30, 2018 to engender more competition between potential MAPs — and provide better value for consumers.

The DisCos have failed to meet this deadline and at least four million unmetered Nigerians are at the receiving end of the exploitation of estimated billing.

“Several of the DisCos experienced slippage in the timeline stipulated by the Commission and this infraction is being handled in line with the enforcement regulations of the Commission,” NERC said in a recent statement.

Why prepaid meter?

Prepaid meter allows you to cut your coat according to your cloth

Having a prepaid meter means the consumers only pay for energy used. It is like using airtime on a prepaid mobile line — you control what you use, and when you run out of credit you can understand why it is so.

The prepaid consumer is not cheated. The meter can also save energy and prevent wastage. Many believe that the reason prepaid meter is not in high supply is because of the elimination of “crazy bills”.

For instance, with a prepaid meter, a consumer can recharge N2000 worth of power and effectively manage it for two months. They can switch off appliances. But revenue-wise, this doesn’t favour the DisCos. Estimated billing allows them to charge based on assumed, rather than actual, electricity consumed. They issue estimated bill of N20,000 per month even if consumption is not more than N2,000.

N20,000 monthly bill… for three hours per day

In Uyo, Akwa Ibom state, officials of the Port Harcourt Electricity Distribution Company (PHEDC) told Davies Jacob, 35-year-old hotel receptionist who lives in a two-room apartment with his wife and child at Oron road, to pay N70,000 for a prepaid meter.

“They have refused to give me a meter,” he told TheCable. “They said I should bring N70,000 for a prepaid meter. This house is not mine, so I can’t spend that much on installing a meter. They bring more than N20,000 bill every month and they call it commercial billing. I don’t produce anything in this house, except the fact that I use a few house appliances.

“How then did they come about more than N20,000 monthly? My bill shows that I have accrued a debt of over N280,000. That’s not a correct bill. I can’t pay for what I didn’t use. So, I just pay N5000 every month. Moreover, I don’t enjoy what I pay for. They only give us light for three to four hours daily, and sometimes we don’t have for as long as three days.”

Closing the metering gap

After privatisation in November 2013, DisCos committed to closing the metering gap and set a target of supplying 4.92 million meters within three years, but a report by NERC released at the end of 2017 revealed that they had supplied only 201,756 meters. That is a shortfall of 4,718,244 meters. Their annual metering target is 1.640 million meters.

In 2018 alone, they supplied 79,850 prepaid meters. As at December 2018, only 3.7 million customers, out of over eight million, had prepaid meters. That means 55 per cent of the customers are charged based on estimated billing.

Industry insiders told TheCable that the DisCos are not enthusiastic about prepaid meters and are trying to frustrate the effort of making them available. Estimated billings bring in more revenue, even though it is only the third option proffered by NERC to help the DisCos recoup investment.

The first is the Credit Advancement Payment for Metering Implementation (CAPMI). NERC passed this regulation in 2013. A willing customer would pay a certain amount to the DisCo within its area for the procurement of meter. This will be repaid over time through deductions from their monthly bills. But owing to certain irregularities, NERC stopped it, re-introduced it, and then finally stopped it. In came MAPS.

The MAPS regulation aims to bridge the metering gap and encourage the development of independent and competitive meter services in the electricity industry.

Scammed, and not refunded

Only the lucky few in Oyo state have prepaid meters

How can you pay for a product and still not take delivery after two years? Akin Ibidoja, speaking to TheCable at his residence at Akinyele local government area of Ibadan, Oyo state, cannot understand.

He had gone to the Ibadan Electricity Distribution Company (IBEDC), Nigeria’s largest DisCo, and paid N40,000 for a prepaid meter — but two years on, he hasn’t received what he paid for.

“It’s like a scam to me. It’s a shame! This is very bad, even in a country where there is law,” he laments.

“They keep telling us it is not available. They are supplying us darkness for what we paid for.”

In the same area, a pregnant woman tells TheCable: “We waited for about two years before we could get the meter and that was after paying for it. The contractor said the meters that were released to their station were about 50, which would not be enough because they had over 500 customers on the waiting list.”

In Osun state, Toye Olanrewaju, in Olorunda local government area of Osun told TheCable she got a prepaid meter after paying N50,000 and waiting for 12 months.

“I got it after one year,” he said. “During the period of waiting, we were told that they had many requests on ground, and if we needed it quickly, we have to pay an extra amount of money. To make the process faster, you pay N50,000. So it depends on your financial capability. The one we are using here, we paid N35,000 to get it. For instance, my friend recently got one and they paid N60,000 for it. What they do is that they divert the meter to the people that can pay more. For some people, it is five years and they still haven’t got the meter.”

In Rivers state, Josh Emmanuel, an academic who lives in Woji area, Port Harcourt, is almost giving up. Two years ago, he paid for a prepaid meter and is yet to get it. Tired of the monthly estimated billings, Emmanuel had in 2016 paid N32,500 for the meter and was told it would be available almost immediately.

“They are still bringing me estimated billings,” he says angrily. “When I went back there last December, I was told the meter wasn’t available yet. Another time, I was told that the ones available have been given out, and subsequently they told me that it was available, but the box is not there, and I should pay additional N10,000 for the box.”

Three years to get a prepaid meter

Another consumer, Iyabo Awe, who lives in Ibadan south-west local government area of Oyo state, said getting her meter was full of twists and turns.

“We got the prepaid meter about three years ago. It wasn’t easy. We paid at IBEDC Odo-Ona and it took us many days to get it. We paid about N24,000 for one. We paid for two, but we got one, even though we heard it should be given free of charge. We paid through the bank and even paying was not easy,” she says.

On the other hand, customers who have not been issued prepaid meters tell TheCable that the reason given by the DisCos for the delay was that there were too many requests but only a few meters available to cater for the numerous requests.

A “crazy bill” of N557,000 from Jos DisCo

The officials, in turn, use this as an opportunity to rip customers off. The meters are allocated to customers who are ready to pay a higher fee for them. In desperation, customers pay between N50,000 and N70,000, depending on how quickly they want to get the meters.

“We collected the prepaid meter in 2017. It was expensive. We don’t have a problem with our consumption of electricity. We only pay for what was supplied to us. But the hardship involved in collecting it is not okay. We waited for about two years before we could get the meter. That was after paying for it,” Akin Ojo, a customer in Osun state, says.

“To be sincere, we consumers do not enjoy the process of obtaining the meter, so anybody that cannot spend money won’t get a meter. They will tell you it is unavailable. Now we want to get a new meter and we were told you will have to pay N70,000 for it. They are hoarding it.”

DisCos’ progress on MAPS

TheCable asks Tayo Adekunle, head of corporate communications, Benin Electricity Distribution Company, BEDC, why his company has not engaged new meter asset providers.

“We have submitted our application to NERC presently. And we are waiting for NERC’s approval. Once they give approval, we start engaging the meter providers. Without NERC’s approval, we cannot proceed, and I think that is the same for the other DisCos,” he says.

According to him, BEDC is “willing and ready” to key into the MAP scheme and has received about 27 bids from different contractors. Seven of the bidders have been shortlisted and sent to NERC for approval.

According to the MAPS regulation, which came into effect from the April 3, 2018, the regulator is supposed to conduct due diligence on all applicants for the purpose of granting “No Objection” to participate in the procurement process.

The document, titled Meter Asset Provider 2018, Regulation No: NERC-R-112 states, “The Commission shall engage the services of a tender auditor to audit the conduct and outcome of a DisCos procurement process for the engagement of MAP. It is upon completion of evaluation of bids, that the successful applicant would then submit an application for the grant of a Meter Asset Provider Permit to the Commission.”

NERC is responsible for granting the permit to the MAPs and then publishing the names of successful applicants in two national newspapers. The publication is also meant to involve the monthly metering service charge and a detailed roll-out plan.

Where are we?

John Onyi, the manager of public communication at the Port Harcourt DisCo, says the process of appointing meter asset providers has been completed.

“To the best of my knowledge, we are waiting for NERC’s approval. The information you are asking is not in the public domain yet. But as soon as NERC flags off MAPS, you will know,” he explains.

NERC, however, says the DisCos are not saying the truth.

Moses Arigu, the commissioner for consumer affairs, says sanctions are on the way.

“Have they done what we told them to do? This is just typical of us, we don’t like to tell the truth. As I speak, we’ve been having several meetings and we are sanctioning them (DisCos) for everyday that they do not meet the deadline,” he says.

Babatunde Fashola, minister of power, recently told Channels TV that 121 companies had submitted bids, 60 were shortlisted and 14 are now qualified.

Consumers are, nonetheless, not that enthusiastic about official talk.

For Etim Sunday, a 38-year-old dry cleaner, he would rather rely on his generator than power supply from the national grid. His shop, along the Bennet Bassey street in the Akwa Ibom state capital, has two washing machines and a big generator which keeps business going for him.

Sunday says he only gets two hours of electricity daily, yet he needs to meet his customers’ needs anytime they come.

“I don’t have a meter. I pay a fixed charge of N3,000 to the landlord monthly but I don’t get to enjoy the electricity supply I pay for as they only bring it for two hours and that’s all. As a matter of fact, I’m used to working with my generator alone. I have to meet my customers’ needs at all times.”

The average Nigerian electricity consumer, it seems, has not faith in the power sector.

This is a special investigative project by Cable Newspaper Journalism Foundation (CNJF) in partnership with TheCable, supported by the MacArthur Foundation. Published materials are not the views of the MacArthur Foundation.